Wednesday, October 5, 2011

Dreamforce 2011: Salesforce &amp; the Social Enterprise Will Be Here All Week (Part 1)

Every time I write about Salesforce, I feel compelled to tell the same story as my opening. So I’m gonna again, because I genuinely think that its vital to understand where they are coming from with everything they do. I know this is about 2+ weeks after Dreamforce and this is in three parts but…..

The Same Old Story…In A Good Way

Back in 2003, I was in Shanghai to do a speaking engagement. By sheer coincidence, the then salesforce.com Chief Strategy Officer Tien Tzuo, now the CEO of Zuora, was there too. We were becoming friends at the time and decided to get together for breakfast. I was in the midst of writing the 3rd edition of CRM at the Speed of Light and I wanted to get an idea of what Salesforce was thinking about.

Tien told me the following (of course paraphrased and I’m sure a bit of a senior moment, when it comes to total recall, too):

“CRM is an entry point. What we are planning to be is the business web. That means that we want to be the platform for all business apps. When a business starts its business day, they open up their apps on us and all day, all their apps are running on our foundation.”

“The network is the computer. That’s something that you’ve heard of for a long time. Software is something that needs to sit inside the network, not on individual desktops. We envision a scenario where everyone goes to work, fires up their browsers, looks at Yahoo, does their personal stuff, fires up their applications and its all inside the network. We want to provide that service…. You’ve probably heard this one before, but it’s like the movie ‘The Matrix.’ The whole world works within the public network, available to you anytime anywhere for anything.”

Even though he says “Yahoo”, it is a clear exposition of what Salesforce has been thinking and doing since even before 2003 - and they’ve never wavered. With Force.com and now with their vision of the social enterprise and an open platform, it’s the same thing. They’ve remained entirely focused on this for all that time.

To understand this, is to understand who they are and what they do and what the social enterprise is, and how they’ve dominated the market, forcing companies much larger than they are to respond to them as the market leader.

Fast Forward to 2011

By now, if you were at Dreamforce or if you read something about it, you know the one theme that dominated Dreamforce 2011 - the social enterprise. Not surprisingly then, the technology that dominated Dreamforce 2011 was Chatter, which Marc Benioff sees as the vehicle that carries salesforce and its customers to the social enterprise. But there was more than that to consider. The announcement that had immediate impact? The Data Residency Option (DRO). The announcement that was hyped up beyond its actual importance? That would be product social networks. The announcement that was most important to the future? The social enterprise.

But the goodness kept flowing at this event, which was arguably the most important one that salesforce ever held (we’ll see why later) There was SO much more - salesforce goes to a fully open platform with of course, the proper paean to Apex. Then there were key partnerships with Infor and Accenture, Workday and Concur, announced with less fanfare than they deserved actually. With these and a couple of other moves (Kenandy, et. al) we see salesforce moving with gusto into the back office. These partnerships indicate a more subtle, but really, really important change in thinking -from the old AppExchange thinking - marketplace - to the new partner thinking - ecosystem. Not a revolutionary approach, others like Microsoft have long understood the value of the ecosystem, but a vital one for any company that wants to get even bigger than it is today and be more dominating, which, make no mistake about it, salesforce wants to be.

So, lets start the ride and see where it gets us. As always, if nothing else, I’m gonna have some fun. For that matter, (what a segue!) lets start with…fun. In a manner of speaking.

The Value of Atmosphere…On With the Show

While I was following the whitewater-producing tweetstream during the 45,000 person strong conference, I saw several tweets that were of the following type: “I LOVE Dreamforce! This is AWESOME!” ”I heart salesforce” etc. What made them stand out was that:

They were tweeted before Dreamforce even started

They are far more typical at a Lithium or Radian6 conference than an enterprise software conference. More typical tweets at enterprise software conferences are something like “@benioff just said, social enterprise is important. |Agreed.”

I wouldn’t read too much into this, but the nature of many of the tweets at this conference directly contrasted with the nature of tweets I always see at SAP’s Sapphire or Oracle’s Open World or Microsoft’s Convergence. They reflect the difference between the perceived culture of salesforce relative to any other company of comparable or larger (or smaller) size in the world of enterprise applications. Dreamforce is orchestrated around high energy with Hollywood effects that are designed to capture the pop culture vibe of a music festival - and to remind all generations of attendees of their youth. I mean think about it - Neil Young for boomers like me; Metallica for the Gen Xers and oldest Gen Yers in the audience; Wil.i.am for those young enough (or young at heart enough) to like contemporary pop music. Not a single generation missing appeal from the mélange of rock stars. While this may not be an entirely deliberate mix - and probably isn’t a formal emotionless choice - it suits one of salesforce’s primary purposes for Dreamforce. They provide the kind of atmospherics constantly that will enforce the experience of the conference goer. Salesforce.com is the only enterprise software company with fanboys. (Oh, be quiet, Mac lovers. Apple isn’t an enterprise software company.)

This isn’t surprising. Conferences like Dreamforce (or the other above mentioned ones) are very important inflection points for companies - especially in the high tech world. For example, the announcements coming from them can have immediate, same day (though not necessarily long lasting) impact on stock prices, as my always-brilliant colleague, friend and fellow influencer, Denis Pombriant pointed out to me. But these conferences will always have long lasting impact on the fortunes of the company holding them because the experience impacts their customers, their business partners, the financial analysts, and the influencers who attend. Since most of them are human beings - though there are exceptions - this means that how they felt about the conference shapes their memory of it, not all the details, and that shapes what they later think about and do with that company. This can be a make or break experience in its extreme. Things done at a Dreamforce can shape the perception of salesforce for at least the coming year or more. What gets remembered is the passion rather than the message. I dare anyone to tell me off the top of their head what the theme of Dreamforce was two years ago (no googling it). But you remember it was a cool conference, right? It was exciting right? You remember the passion. And that Marc was probably killer right. Some of you may remember Dreamforce’s theme last year, though with all the talk this year about the social enterprise, my money goes on the “you don’t” side of the bet. But, regardless of how many of you do, I’ll bet more of you remember Marc pulling his iPad out of his pants.

And there’s nothing wrong with remembering whatever it is you remember or in remembering how you felt. The influencers/analysts/journalists like me can provide the record for you about what went on and we can dissect it for you - either accurately or not so accurately but what we can’t do is provide you with the emotional heat map of the company which drives a lot of how you are going to relate to it, of how much you’re going to engage with it and how you’re going to respond to its clarion calls. Customers who buy salesforce software/services/products buy them because they make sense for their company, because they work well for the most part and do the job they need it for and because salesforce is a company they like associating with. They feel good about that. If I were you, and trying to assess the impact of salesforce, I wouldn’t underestimate the importance of that feeling. We can get into how all that works when it comes to what customer value is and how it differs from what business values, another day. Mark my words, salesforce doesn’t underestimate it.

Dreamforce provides an atmosphere unlike any other conference of its type. If you take a hard look at it, SAP’s use of technology at Sapphire in 2010 (and I hear 2011, I was sick this year and missed it) has been far cooler than salesforce’s has ever been. Sapphire has touchscreen walls and banks of TVs showcasing live performances on the conference floor everywhere and a room viewable through glass walls that looked like an NBC studio full of audio/video technology. They had open lounges in large roped off areas for varying types of VIPs in their conference halls with food out and working power/connectivity, rather than chairs and couches here or there, so that the analysts or the top customers felt like they were in the midst of something. They had their senior execs not only available to meet (scheduled) with key VIPs all the time but had them freely and informally wandering through these open lounges to hang out with the same folks or other who they hadn’t scheduled a meeting with. When it came to open dialogue with executives, SAP dominated.

Where salesforce shines however, is in their ability to just plain bring it. As in an your face, always pumping beat that permeates the entire conference whether music is playing or not. While there were DJs playing in the main hallways of Moscone North and South (don’t remember about West), that wasn’t the driving energy. It was the way that people were interacting and how salesforce staged this at every level.

The smarter companies in the salesforce ecosystem played into this environment. Salesforce partner, Hubspot, who may be the best inbound marketing company in the world and one that salesforce has a sizeable investment in, had an open tent outside where people could come and play so to speak. And so people did, nonstop throughout the conference, rockin’ in the Hubspot tent.

The conference showroom was packed with companies wanting to be part of the salesforce ecosystem with large and small booths. In fact, I overheard a significant number of industry veterans and a couple of random conversations, where the conversants, thanks mostly to the buzzing always electric showroom floor, said “salesforce is the new Siebel.” Now, to mollify any fears that anyone might have, given Siebel’s rather insidious (and usually deserved) reputation, this was more about the number of participants in the exhibition hall primarily and the number of people excited about seeing who and what was in the salesforce.com ecosystem.

This was actually a good and bad thing.

Honestly, Oracle usually has a significantly larger number of exhibitors at Open World than salesforce did here. But the environment at Dreamforce in and out of the hall made it feel gigantic and vibrant. That said, there was a problem. It was far too crowded. People were bumping into each other regularly and hard enough to distract. The noise level was so high that it was hard to hear what some of the exhibitors said.

What Oracle does and salesforce can learn from is to split it into two different exhibition halls in Moscone Center. Which is the other reason that salesforce’s seemed bigger. Oracle’s is so big that there are two exhibition halls.

But these problems, while not minor, are not significant either. The atmospherics are a masterful and important aspect of what salesforce does for Dreamforce that I think is appreciated as an individual experience but underappreciated as a strategy. They aren’t just a tactic for having fun but a strategy to create an experience that can have an incremental impact on financial performance and a big impact on market perception. Neil Young is there to support that perception, not just cuz it’s so cool to have him. Though it was.

The Vision

“I am not what has happened to me. I am what I choose to become.” - Carl Jung

“Life is a series of collisions with the future; it is not the sum of what we have been, but what we yearn to be.” - José Ortega y Gasset

I want to run how Marc Benioff seems to think about vision by you.

Make no mistake about it. I know unreservedly that Marc Benioff is a true visionary and one of the most powerful visionaries in all of business, not just technology. He is not only able to articulate his vision to the cognoscenti but also to the masses making him perhaps not unique, but a genuine rarity. What makes him truly rare though is not his ability to inspire people to support his vision, but in fact, one other quality that I’ve noticed over the years that he commands and that was reinforced this time, though not only at Dreamforce per se. He has a ruthless commitment to carrying his vision forward - that would be ruthless in a driven way, rather than a “I will slaughter you if you get in my path” way. Let’s say relentless instead.

“I am only accelerating. We are adding more than 1,000 positions this year and we are aggressively growing our company. We had a fantastic quarter. I don’t know if this is true of all companies. I am not an economist. I feel good about jobs, the global economy (but I understand the concerns) when I see the volatility in the stock market….”

This hearkened me back to when I was a salesforce.com user in 1999 for the small company I was with at that time. I hated their SFA application so much, it was so kludgy, that I blasted it in the first edition of CRM at the Speed of Light. The reason was that Marc was declaring that far back that they were going to be the model and the leader for applications for the whole enterprise, not just CRM. I remember thinking - and writing - “he can’t even get the export of .CSV and .XLS straight. Fix that first.”

Back to 2011, I coupled that bold and what I thought at the time (wrongly), was a reckless declaration with the hiring of 1000 more employees this year despite a volatile, dangerous economy. Then I took those two assertions and the avowal that they will be the provider of the social enterprise for all businesses. All of those were then combined with his contention, during a discussion with influencers and media at the conference, (paraphrased) that at this time, realistically, most businesses don’t know what the social enterprise is and if you asked them they wouldn’t want to know, but that down the road they will have to know.

This makes for a heady visionary brew when mixed.

What comes across clearly first is that salesforce is still driven by that 2003 vision I mentioned in the first part of this post. Marc doesn’t let current conditions stand in his way of making sure that he executes on that vision, though he is certainly cognizant of them. His declarations, despite how outrageous they can seem at the time they are made, are actually being made as an exceptionally well calculated gamble. He knows what he has to do; he knows that he has to prepare for the future to be on the top step; he proceeds with intimate knowledge of the current conditions; he anticipates what he thinks future conditions will bring; and then he represents - if not in lockstep with the current conditions, then despite the current conditions. You saw what Carl Jung said; and José Ortega y Gasset; Marc Benioff’s version is, “we’ll be the first thing you see when my future becomes your present” or in more practical terms, “we are going to be there when you realize that you need a social enterprise.”

This position has significant risk. So far his bold declarations, backed by his willing investment into the execution of that vision, have paid off. He has been unerring in his calculation to this point. But, one bad judgment error and there could be major problems. However, to salesforce’s credit, they’ve reached a point, with the current $2.5 billion run rate and their fans worldwide, that they could absorb a body blow or two or a misstep here and there. So they can take these conservative risks. Make no mistake about it; declaring a social revolution and the era of the social enterprise is a measured risk. In my eyes, it’s a smart one - and one that I believe is, because of different reasons for me than theirs, but an inevitability in my thinking too.

Okay, we’ve done the framework thing and the vision thing now. Let’s get into the keynote and the messaging and the future of salesforce. But…you’ll have to wait until tomorrow. HA!